Briefcase: June 21, 2007

June 21, 2007

NEW YORKTreasury notes climb, forcing stocks down A surge in Treasury yields rattled Wall Street Wednesday, forcing stocks to give up early gains and drive down the Dow Jones industrial average more than 140 points. The 10-year Treasury note's yield soared to 5.15 percent late Wednesday from 5.09 percent late Tuesday, reigniting worries among stock investors that high rates could thwart corporate deal-making and further injure the limping housing market. The Dow fell 146.00, or 1.07 percent, to 13,489.42, after bobbing in and out of positive and negative territory earlier in the day. Broader stock indicators also tumbled. The Standard & Poor's 500 index declined 20.86, or 1.36 percent, to 1,512.84, and the Nasdaq composite index fell 26.80, or 1.02 percent, to 2,599.96. RICHMOND, VA.First quarter gloomy for Circuit City Electronics retailer Circuit City Stores Inc. said Wednesday it lost $54.6 million in the first fiscal quarter -- when it cut jobs to reduce costs and restructured to fend off competition -- and withdrew its earnings guidance for 2008. The results came a day after larger rival Best Buy Co. reported sharply lower first-quarter profit and downgraded its 2008 earnings outlook. Both retailers say the softening economy is steering shoppers away from high-margin items such as flat-screen televisions. Rising gas prices are having a direct impact on everyday spending, and middle-income shoppers are almost as likely to curb their spending as those with incomes under $50,000, said Wendy Liebmann, president of WSL Strategic Retail, which analyzes consumer shopping patterns for retail industry clients. WASHINGTONFormer Enron officer to pay out $300,000 Enron's former chief financial officer will pay $300,000 to settle allegations that he helped the company commit fraud, federal regulators said Wednesday. Jeffrey McMahon, who neither admitted nor denied the Securities and Exchange Commission allegations, also will be barred from serving as an officer or director of a public company for five years, and will be suspended as an accountant for at least three years. Under the agreement, which is subject to the approval of the U.S. District Court, McMahon will pay disgorgement of $150,000 and a civil penalty of $150,000. McMahon has been the president of Houston-based Zilkha Biomass Energy since 2004. The SEC alleged that McMahon participated in the "sale" of an interest in Nigerian power generating barges to Merrill Lynch that allowed Enron to improperly report $12 million in earnings in the fourth quarter of 1999. LAS VEGASTracinda bows out of hotel-casino deal The investment arm of billionaire Kirk Kerkorian said Wednesday it was ending negotiations on the possible purchase of casino giant MGM Mirage's Bellagio hotel-casino and its CityCenter project. Tracinda Corp., which owns 56 percent of MGM Mirage shares, last month proposed buying the Las Vegas Strip properties. Tracinda also said in a filing with the Securities and Exchange Commission that it wanted to pursue "strategic alternatives" related to its majority stake in MGM Mirage. The May 21 announcement sent shares of MGM Mirage skyrocketing 27 percent before they retreated. Shares of MGM Mirage fell $7.50, or 8.7 percent, to $79 in early trading following Wednesday's announcement.